FTC Warns Advertisers About 'Up To' Claims

New study found consumers expect maximum benefit

By Katy Bachman on July 2, 2012

Advertisers need to be careful if they use the phrase "up to" in claims about their products. The Federal Trade Commission issued a new guidance warning advertisers that telling consumers they will save "up to 47 percent in energy costs" are likely to believe they will get that result.

The FTC's guidance was based on a study it conducted in May that found that consumers believe "up to" means they will get the maximum savings.

The new guidance is part of the agency's efforts to make sure that environmental marketing claims—a popular marketing trend among advertisers—are truthful and based on scientific evidence.

"Before advertisers may have thought that if one person got the maximum result, they could make the claim. Our study suggests 50 percent or more of users should get that result," said Mary Engle, the associate director of advertising practices for the FTC's bureau of consumer protection division.

Though Engle said the guidance was not a shift in policy or regulation, the new guidance clarifies the FTC's fuzzy "up to" claim definition of an "appreciable number of consumers realizing the maximum advertising benefit a substantial amount of time."

The new guidance could also run contrary to the advertising industry's self-regulatory standard that 10 percent of the users of a product must realize the maximum benefit.

"The safe harbor may not be so safe any more," said John Villafranco, a partner with Kelley Drye. "The FTC's release highlights it is suspicious of 'up to' claims and that it is scrutinizing the data. This may mean advertisers need to do a better job of qualifying the claim or include a disclosure."

"If the standard is being changed by the FTC, people will want to pay close attention," said C. Lee Peeler, CEO of the Advertising Self-Regulatory Council. "This is a new development, focusing on an issue that has been open since the 1980s."

The FTC conducted the study after it settled a round of charges in February against five window manufacturers that made unsupported claims about the energy efficiency of their windows and how much the windows would reduce consumers' heating and cooling bills.

The FTC is in the process of reviewing its guidelines for environmental marketing claims, known as the green guides.